Chicago Uses TIF Revenue for Affordable Housing

Earlier this year, the Chicago, Illinois City Council Finance Committee passed a measure that would allocate more money for affordable housing. The measure was approved by a 13-8 vote and now goes before the full Council. Some Council members are concerned that Chicago Mayor Richard Daley’s opposition could cause the bill to stall.

If passed, the measure would allow about $100 million a year to be allocated from specially designated “tax increment finance districts,” and be used to preserve or build affordable housing. As written, the bill requires that 20 percent of the money collected from these areas be set aside. Tax increment finance districts are areas in which the amount of money that can be collected by local governments is frozen at a pre-determined amount. Anything collected above and beyond that amount is used to finance construction projects in the area.

Several cities across the U.S. use TIF money to promote development in areas that are either in decline or simply need to be refurbished. One common concern with TIF districts is that they will become gentrified – meaning middle and upper income people begin moving into the area, forcing lower-income residents out. Communities often work to prevent gentrification by instituting affordable housing requirements in TIF districts.

Both Mayor Daley and the Community Development Department have expressed concern that allocating so much money for affordable housing will interfere with other development goals aimed at creating jobs.

There is no indication yet when the measure will be voted on by the City Council or how quickly the money would be allocated.

The House-Buying Process

This article looks at the processes involved in house purchase and the roles of the professionals involved, including estate agents, solicitors and conveyance’s.
It also covers the nature and contents of two important documents: the mortgage offer, the mortgage deed.

Role of the estate agent.

Brings the property to the market by private treaty or at auction;
Acts as the agent of the vendor, but can advise both parties on areas where
no conflict of interest exists; Receives offers and advises vendor on acceptance.
Liaises with vendor’s solicitors to progress the sale;
Usually paid on a commission basis – typically 1.5-3%, or may be less or a
sole agency.

Other services offered by estate agents: auctioneering, property listings, property management and letting services, arranging mortgages or insurance, survey and valuation services.

Property Misdescriptions Act.

Estate agents have the responsibility to ensure that advertisements and property particulars are not exaggerated or misleading: descriptions must be accurate, the overall description must give a reasonable view of the property, specific problems, however, do not have to be mentioned, mention can be made of special facilities but should carry a qualifying
statement unless the agent has seen documentary evidence of fitting/guarantees etc., measurements should be accurate to within 10cm, photographs should not be misleading.

Role of solicitors/conveyancers.

Investigation of title.

To ascertain whether property is being sold by the legal owner who is entitled to sell it what it purports to be free from restrictions that would inhibit the sales process. It is possible to get insurance to protect lenders against defective title.

Registry searches: Land registry or land charges registry. Local land charges registry. Parcels index – checks whether land is already registered. Companies register. Bankruptcy search. Commons registration – checks whether it is common land.

Purchase transaction.

Confirm what is/is not included in the sale;

Draw up contracts;

Exchange of contracts – point of no return;

Ensuring funds are in place – deposit, mortgage funds;

Assignment of life policies;

Completion – handover money, receive keys etc;

Legal advice at all stages.

Legal costs.

Solicitors’ fees;

Search fees;

Electronic transfer fees.

Professional negligence.

Failure to identify a defect in the title. Solicitors owe a duty of care. They can be sued in civil courts. They carry professional indemnity insurance.

Home information packs.

Government measure to improve and simplify the house-buying process. Home information pack to be prepared by (or on behalf of) the seller before the sales process begins and includes: title documents, replies to standard preliminary enquiries and searches, copies of building regulations/planning approval, draft contract, home condition report – based on a professional survey, including an energy efficiency rating.

There is concern as to whether buyers will be able rely on a survey paid for by the vendor.
For leasehold properties it will also include a copy of the lease, recent service charges, accounts and receipts, details of buildings insurance.

Mortgage offer.

Not a contract – so not legally binding. Can be withdrawn if: false or inaccurate information has been submitted by the applicant, the applicant’s financial position changes, a change occurs to the property making it less suitable as security.